How to Remember and Prioritize Forex Trade Setups

Forex trading journal

Happy Friday and Happy Holidays!

This week’s question comes from Ramesh, who asks:

How do you remember all the pairs you go over and which ones to trade? For example, you often recall or refer to a previous chart analysis in your present analysis, going through everything again. With so much happening across all markets daily, how do you remember and filter the important and the really good ones?

The short answer is that I write down everything I do, including the currency pairs I’m watching.

But you know I couldn’t stop there.

Once the wheels got to turning and the floodgates opened, the answer expanded into a detailed breakdown on my process for keeping trade ideas organized throughout the week.

Let’s begin.

The How, What, Where and Why of Journaling

I know what you’re probably thinking.

A journal, really?…

But before you go too far with that thought, let me just say that I used to think the same way.

When I first heard about the idea of starting and maintaining a trading journal over a decade ago, I thought, “journaling just isn’t my style, and I certainly don’t need one.”

After all, what’s wrong with just writing the currency pairs down on a sheet of paper?

I couldn’t have been more wrong.

By the time you finish reading this post, you’ll see why Forex trading and journaling go hand in glove. You can’t have success in one without doing the other.

Let’s start by covering a few basics, including the medium and frequency as well as what to write.

Choose a Medium

Desktop, laptop, tablet, phone – take your pick.

With dozens of platforms available today and hundreds of apps to choose from, the way you journal is only limited by your imagination.

I prefer to type out my notes on the computer. Although this probably has a lot to do with the fact that I’m already here writing blog posts, so why not journal while I’m at it?

A simple Word document or Excel spreadsheet will do. Of course, you can also opt for a trusty pen or pencil and a notebook if you prefer.

The two most important factors when deciding on a medium are ease of use and comfort. If it isn’t easy to use or you aren’t comfortable with it, you’re far less likely to continue journaling over the long haul.

Also, be sure to choose a medium that you’ll have access to every day.

How Often Should You Journal?

Whether you trade from the 1-hour chart or the daily, you should be writing in your journal every day.

This is beneficial for two primary reasons.

  1. It’s easier to recall and document what just happened than it is to remember what happened last week
  2. A daily task will develop into a habit much faster than a less frequent one

I tend to do my journaling at the close of each session (5 pm EST) while everything is fresh in my mind.

What Should You Write?

So you’ve found your preferred medium, and you know how often you should be journaling.

Now, what the heck do you write?

First off, let me say that there are no rules here. Your trade journal will never be perfect nor should it be.

Instead, it should be a little messy and free-flowing.

With that said, there are a few tips I can share with you that have helped me over the years.

Date and time

This one might go without saying, but I wanted to make sure I covered all the bases. You should start off every journal entry with the current date and time.

Currency pairs you’re watching

Which currency pairs are you most interested in right now?

This is what journaling is all about – keeping track of the best opportunities and learning at the same time.

Just be sure to keep your list manageable. More on this in the next section.

What specifically needs to happen for you to pull the trigger?

For the currency pairs you just listed, what needs to happen for each one to be considered tradable?

For instance, what key levels are you watching? Is recent momentum bullish or bearish? Are there any technical patterns that stand out?

By documenting the answers to these questions every day, you’re unknowingly training your subconscious mind to do the same in real time.

What would negate these trade ideas?

What price action would negate any one of the opportunities you just listed?

This process will train your mind to begin thinking defensively, which is key to achieving success as a Forex trader.

What did you do today that was good/bad?

Did you make any mistakes today? Perhaps you stayed disciplined during a major news event and avoided what would have been a loss.

Whatever it was, write it down. And if it was a mistake, write a quick sentence or two on how you can improve for the next time.

The topics above should be more than enough to get you started. But above all else, keep your journal informal and have fun with it.

Keep Your List Small and Manageable

How many trade setups do you need each month to make a considerable amount of money trading Forex?

I can hear some of my more loyal readers saying it aloud.

Answer: Just one.

That’s it. One quality trade setup each month is all you need to grow a trading account. That doesn’t mean you shouldn’t trade more than once, but it does dispel the myth that more trades leads to more profit.

In my experience, just the opposite is true.

There’s this industry-wide misconception that we need to trade every week or even every day to make the big bucks. To accomplish that you’d need to keep a dozen currency pairs on your radar each and every week.

Well, forget all of that. Anything more than a handful (3 – 5) trade ideas for any given week is a distraction.

How many times has the following scenario happened to you?

You open up your trading platform to see the EURUSD breaking above a key level, so you pull the trigger and get long.

About six hours later you check in on your position to find that the market has moved against you. But all of a sudden you see the AUDUSD gearing up for what could be a big move.

So you think to yourself – why sit in a losing EURUSD long position when you could be profiting from the AUDUSD, right?

You quickly close out your first position for a small loss and jump straight into the AUDUSD. Unfortunately, a few hours pass and you find that you’re once again in a losing position.

Long story short, you jump in and out of trades a few more times before the weekend arrives.

By the end of the week, you’ve managed to do nothing but whittle away at your account balance. Instead of the profitable week you’d hoped for, you’re now down 8%.

If that sounds familiar, you’re not alone.

Situations like this occur due to a lack of planning. Instead of being focused on just a few currency pairs that offer the best opportunity, you find yourself chasing pips left and right with no rhyme or reason.

A journal allows you to cut through the distractions so you can focus on the quality opportunities.

The good news is that a bad habit like the one I just described can be broken.

Better yet, you can create a new good habit to take its place.

Consistency is Key

The key to all of this is to be consistent. A common belief is that it takes 21 days of performing a specific task before it becomes a habit.

Whether or not that’s true is debatable, but what isn’t up for debate is that consistency breeds discipline. So the more consistent you are at journaling, the more disciplined you will be when it comes time to put on or manage a trade.

This is why it’s so important to keep your list manageable. You’re far less likely to write every day if you’re trying to keep track of twenty-three trade ideas.

If on the other hand, you’ve chosen just three or four ideas with the most potential, it becomes easy to maintain a writing schedule. In fact, four trade ideas shouldn’t take you more than 10 minutes each day.

The hardest part of developing any new habit are the first few weeks. Once you get past that, journaling will become as effortless as brushing your teeth.

Dare I say you’ll even begin to enjoy writing about the price action you observe from day to day.

In fact, I know you’ll enjoy it once you start to see your trading improve.

Final Words

Regardless of the financial markets you trade, the time frames you utilize or the strategies you employ, starting and maintaining a trading journal is one of the quickest ways to improve your trading.

It will help sharpen your technical skills and strengthen your discipline simultaneously. There’s nothing else quite like it.

Think about it like this…

Those who study psychology observe and document human behavior.

An archaeologist finds and documents remnants of a time long past.

An astronomer studies the stars and planets, documenting discoveries along the way.

Take a look at just about any profession in this world, and you’ll notice that they all have one thing in common – those who practice them observe, discover and document their findings.

This exercise leads to that “aha” moment of finding a new pattern in human behavior, digging up a new species of animal or discovering a new planet.

Learning to trade the Forex market is no different. Your “aha” moment will come when you begin to connect the dots, and journaling every day can get you there.

Your Turn: Ask Justin Anything

I’d love for this new weekly Q&A to be successful and provide an invaluable repository of answers to common Forex questions.

To do that, I need your help.

Here’s what you can do to get involved and have your question answered in next week’s post:

  1. Ask questions. Post them in the comments below or Tweet them to me @JustinBennettFX
  2. Help me answer questions. If I missed something or if you have something to add, don’t hesitate to leave a comment below.

Leave a Comment:

24 comments
Zahra Moosa says

Thanks for the post Justin, very insightful. You hear alot of people saying that one must keep a trading journal, but you break it down into what we should be writing specifically.

So far, I am just loving your content, I signed up for the free course. on pin bars and already – i have made back HALF of what I have lost in just 1 week!

I cannot wait to make some money so that I can actually afford your membership.

Thanks for everything

Reply
    Justin Bennett says

    You’re very welcome, Zahra. That’s great to hear about your success with just the free courses. Cheers.

    Reply
Greg says

I use the Google KEEP app to document my trading watch list and reasons why I am looking to trade a specifc pair. KEEP allows me to share my notes between PC, laptop or mobile phone, so I can capture thoughts and progressive trade management observations on any device at any time. When my trade concludes, i also capture any lessons learned about how I could have managed the trade better, then transfer all this info to my trading log in myfxbook. Unfortunately, the myfxbook people refuse the provide a function that allows me to export my comments into a spreadsheet so I can more easily analyse my lessons learned for any mistakes I might be making consistently.

Reply
john njoga says

Thanks for your posts. Very informative for one who is new to forex like me.
A question for you; With so many forex brokers, how would one make an informed choice? From your experience , your top 3 for someone starting with a small trading account of about $1000?
Looking forward to more posts in the new year.
Wishing you happy holidays!
john

Reply
    Justin Bennett says

    Hi John, thanks for the question. I’ve added it to the list of possibilities for the next Q&A segment. Cheers.

    Reply
Prabal says

Excellent Article.Teaches one how to finally profit consistently after knowing all the tricks of the trade . An advise which can be taken as a Christmas gift .

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michael walker says

I draw my trend lines and support and resistance on my charts including text about what is happening on each chart I am studing on the particular day and end of the day print it and file into a filing system I have.So far it has worked but only time will tell.

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Gcinumuzi Ngwenya says

Hi Justin, thank you very much for an insightful explanation with regards to Journalling. My problem is that I am battling to sport good trading opportunities, at times I see something like a Pin Bar then I trade it only to find that it goes against me. You also see something like head and shoulder or W and I trade it and it goes the opposite direction. How do I improve my skills of identifying good trading opportunities?

Reply
    Justin Bennett says

    One word – practice. It takes years to develop the skills you’re looking for, but it is possible.

    Reply
Juan says

Thanks for the explanation, very guided, because what happen to one happen for anyone and those explanations put us to the right thinking avoiding mistakes that we are not been sowing subconciously for not write it down. If we write it will be as a counsel ourself next time we try to sabotage our rules or the strategy that should be follow.

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Thambirajah Yogarajah says

Hi Justin
A very valuable article indeed. I think we are all afraid to maintain a journal because there are not a lot of seccess in our trading. If you are consistently profitable you will start maintainig a journal. I know what you are going to say. If you do not maintain a journal and trade how can you be successful?.

Kind Regards and Wish you and your family a wonderful Christmas.

Thambirajah.

Reply
    Justin Bennett says

    Thambirajah, that is indeed what I’d say. 🙂

    You need to have a way of measuring your performance if you wish to improve. Maintaining a journal is also an excellent way to remember and extract the things you learn.

    Reply
Abraham Olatubosun says

I appreciate your post and i want to share my experience with you all, i started following Justin post last year most of the time i saw his post i will put some thing on paper hoping it will fail, but with time i found myself writing my trade setup which most of them follow Justin path i only trade some times two pair’s a month and my former way of trading 9(nine) to 12(twelve) pair’s losing most part of the trade but now 2(two) to 4(four) trade a month and my account growing with a consistence of 40% every month. Thank you for the great effort Justin

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Sandi says

I did get a lot out of this section. I will start to to use a journal. My biggest problem is having the confidence to trigger the trade. I did enter the GBP/USD, I entered a little bit late,but, I’m wondering if you still think it will get low enough to hit the 1.2090 target?

Reply
    Justin Bennett says

    Sandi, glad to hear it. What I think the GBPUSD will do doesn’t matter. The only thing that matters is what the pair does – either continue to the target area or negate the bias. It’s all about the price action.

    Reply
Nothando says

Hi Justin
I’m a beginner in trading so bear with me for silly questions
I have been reading a lot on your trade setups and weekly Forex forecast and you always mention that when the market breaks a level (support/resistance) we should wait for the market to retest that level. I just wanted to know after it has retested the level should you enter immediately or wait for a sign e.g inside bar ? 🙂

Reply
    Justin Bennett says

    Nothando, that isn’t a silly question at all. I’ll consider this one for a future Q&A post. Thanks for commenting.

    Reply
Daluxolo says

Hi Justin. I’ve heard of Correlation Pairs Do you perhaps trade them and would you advise one to trade correlation pairs. If yes, which ones do you recommend

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Brian says

Hi Justin,

Thank you for a precise and almost step by step instructions on Journaling.

My problem in trading is precisely what you mentioned in the article,which is chasing pips left and right and ended up losing more.

Hopefully by taking your advice can help improve my precision in entering trade. I especially like your Final Words section where you refers to the Psychologies, Archaeologist and the way they excel in their Profession! It is so true !!!

On another note, would you be doing an article on Spotting High Probability Entry? I have this issue of not being able to determine if my entry is good or quality or of high probability… that’s why i chase pips 😛

Tks!

Reply
    Justin Bennett says

    Hi Brian, glad to hear you enjoyed the post. I’ve written about the strategies I use and what constitutes a high probability setup for each. But it’s difficult to generalize the term “high probability” as it varies depending on the strategy employed.

    Reply
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